Wednesday, 9 April 2008
Yarmuth!'s Bad Idea
« Northup Likely to Face Yarmuth In Fall | Main | The Nefarious Acts Of The State Senate »Yarmuth! during his brief tenure in Congress has done little to help funding for the major bridge projects in Louisville. Trying to look like he is "doing something about it", he has decided to jump on board a really bad idea. A federal bank used exclusively to pay for major transportation projects.
Congress should pass a second economic stimulus package that would include a new federal bank to pay for major transportation projects like the Ohio River bridges, according to U.S. Rep. John Yarmuth. Advertisement
"We have the potential to make a historic investment in the long-term economic growth of this country by establishing a federal bank to accelerate billions of dollars in long-overdue infrastructure projects," Yarmuth, D-3rd District, wrote in a letter yesterday to House Speaker Nancy Pelosi, D-Calif., urging her to pursue the idea.
A federal infrastructure bank would obtain money from investors in exchange for a guaranteed rate of return. The investment money would in turn be made available for projects.
The bank would be nothing but a scheme to free up money in the budget so they can spend it elsewhere. The way it would work is simple. Investor A would put $1,000,000 in the new found bank. The bank would then use the money to build "infrastructure". In the mean time the bank would pay some rate of return. Let's say it is 5%. Now all they have to do is pay $50,000 in interest each year for use of the $1,000,000. That would free up $950,000 in the budget. Basically, it is a "creative" way to take on more debt so politicians in DC can spend more money.
Heck Yarmuth! even admits as much.The bank would answer that problem. At the same time, using private investment money on projects could free up more traditional sources of federal money for other projects, Yarmuth said.
What scares me the most about Yarmuth! is not this silly liberal idea, but his fundamental lack of understanding of basic economics. Check out this quote.
Kentucky "has been doing everything it can to fund this project," Yarmuth wrote. "However, the federal government has a responsibility to assist in the completion of this and other national initiatives. This responsibility presents Congress with an extraordinary opportunity to generate long-term economic growth, create jobs, and rebuild our nation."
The last sentence is unbelievable. Government spending money is going to create long-term economic growth and create jobs? He can't be serious? Government doesn't "create jobs". It just takes money from the productive parts of society and redistributes it to fill some perceived need. While government might employee some people through these efforts, the loss of jobs from the private sector is much greater.
The dynamic is the natural result from the removal of capital from free markets. The money going to feed the bumbling government is money that could have been invested in profitable private companies. Those investments would have created jobs as companies try to find ways to expand profit. Productive jobs that would be better for the long term growth of our country than short term government jobs.
I think Yarmuth! should take some basic economics courses. If not then voters need to send him packing in the fall. Hopefully it will happen before his ignorance can damage our nation's fragile economy.
